by Kelley Rendziperis, on Jul 27, 2015 12:38:00 PM
Economic incentives continue to play an important role when companies are looking to open new sites or expand their existing facilities. The capital invested and jobs created during these expansions will often make companies eligible to receive valuable economic incentives such as tax abatements, tax credits, cash grants, training grants, infrastructure grants and other incentives offered by economic development organizations. To help understand economic incentive trends in the site selection process, Site Selection Group has evaluated economic incentive packages awarded to companies across the United States during the second quarter of 2015.
More than $1.32 billion in economic incentives awarded
At the time of this article, Site Selection Group identified 527 projects that were offered economic incentive packages in the United States during the second quarter of 2015. These economic incentive packages represent an estimated total incentives value in excess of $1.32 billion. To generate these economic incentives, companies are expected to spend more than $27 billion of capital and generate more than 92,000 new jobs representing a return on investment of approximately 4.7%. The incentives add up to an award of over $14,200 per new job, and an average deal value of approximately $2.5 million. While the average deal value is $2.5 million, the vast majority of projects, 70 percent, are granted an incentive package of less than $1 million and 83 percent are granted less than the average $2.5 million package.
The following chart depicts the 527 deals broken out by incentives values:
Top 25 economic incentive packages offered in Q2
The following table identifies some of the largest economic incentive deals offered in the second quarter of 2015. These projects provide a great way to benchmark what types of economic incentives exist for a variety of project types. However, it is important to understand the values are estimates and typically only reflective of state-level incentives.
Company Name |
Location |
Incentive Value ($M) |
Capex ($M) |
Jobs Created |
Industry Function |
|---|---|---|---|---|---|
|
Volkswagen
|
Chattanooga, TN
|
$166.00
|
$704.00
|
9,800
|
Manufacturing
|
|
Polaris Industries
|
Huntsville, AL
|
$80.00
|
$172.00
|
2,000
|
Manufacturing
|
|
Volvo Cars
|
Ridgeville, SC
|
$74.00
|
$500.00
|
2,000
|
Manufacturing
|
|
Seldat
|
Piscataway, NJ
|
$51.50
|
$0.00
|
1,050
|
Distribution Ctr.
|
|
Giti Tire
|
Richburg, SC
|
$40.00
|
$560.00
|
1,700
|
Manufacturing
|
|
Audible.com
|
Newark, NJ
|
$39.38
|
$56.70
|
350
|
IT Support Center
|
|
Praxair
|
Danbury, CT
|
$36.00
|
$65.00
|
0
|
Headquarters
|
|
New York Life
|
Jersey City, NJ
|
$33.90
|
$0.00
|
300
|
Business Services
|
|
General Motors
|
Arlington, TX
|
$28.70
|
$1,290.00
|
589
|
Manufacturing
|
|
General Motors
|
Fort Wayne, IN
|
$25.10
|
$1,200.00
|
0
|
Manufacturing
|
|
Brown Brothers Harriman
|
Jersey City, NJ
|
$19.40
|
$0.00
|
110
|
Business Services
|
|
Google
|
Council Bluffs, IA
|
$16.80
|
$1,000.00
|
70
|
Call Center
|
|
Fidelity
|
Jersey City, NJ
|
$16.50
|
$8.80
|
200
|
Business Services
|
|
LMT Mercer Group
|
Trenton, NJ
|
$15.54
|
$19.25
|
60
|
Manufacturing
|
|
Tesla Motors
|
Multiple locations, CA
|
$15.00
|
$2,390.00
|
4,426
|
Manufacturing
|
|
Metal Container Corp.
|
Jacksonville, FL
|
$14.85
|
$170.00
|
75
|
Manufacturing
|
|
United Airlines
|
Denver, CO
|
$13.20
|
$40.00
|
200
|
Shared Service Ctr.
|
|
Steel Dynamics
|
Columbus, MS
|
$12.00
|
$100.00
|
40
|
Manufacturing
|
|
Impax Laboratories
|
Multiple locations, NJ
|
$11.48
|
$17.50
|
50
|
Manufacturing
|
|
Procter & Gamble
|
Bear River City, UT
|
$11.15
|
$450.00
|
200
|
Manufacturing
|
|
Northrop Grumman
|
Multiple locations, CA
|
$10.00
|
$520.00
|
1,359
|
Manufacturing
|
|
Shintech
|
Plaquemine, LA
|
$10.00
|
$1,400.00
|
100
|
Manufacturing
|
|
Ferrous CAL
|
Gibraltar, MI
|
$9.90
|
$53.00
|
100
|
Manufacturing
|
|
Samsung Semiconductor
|
San Jose, CA
|
$9.00
|
$194.70
|
327
|
R&D
|
|
Gestamp
|
Chattanooga, TN
|
$8.50
|
$180.00
|
500
|
Manufacturing
|
For comparison purposes, there were four larger projects, United Technologies (CT), JPMorgan Chase (NJ), Sayreville Seaport Associates (NJ) and GD Copper (AL), which accounted for over $1 billion more in total incentives offered in the second quarter of 2014 than the same period this year. However, the larger incentive packages seem to continue to be dominated by New Jersey’s Grow NJ Program.
For additional information about these projects and others, please contact Site Selection Group.
Source: ICA Incentives
